IKEA has strengths right through its production processes:
Increasing use of renewable materials IKEA improved its overall use from 71% in 2007 to 75% in 2009.
'Smarter' use of raw materials IKEA increased the use of recycled or reclaimed waste products in energy production across all stores from 84% in 2007 to 90% in 2009.
Volume commitments IKEA believes in creating long-term partnerships with its suppliers in order to achieve this. By committing to buying large volumes over a number of years IKEA can negotiate lower prices. This also benefits the suppliers because they enjoy the greater security of having guaranteed orders.
Economies of scale for instance, bulk buying at cheaper unit costs.
Sourcing materials close to the supply chain to reduce transport costs.
Delivering products directly from the supplier to IKEA stores. This slashes handling costs, reduces road miles and lowers the carbon footprint.
Using new technologies for example, IKEA's OGLA chair has been in its range since 1980. The chair has changed through the years to reduce the amount of raw materials needed.